Swiss Substantive Rules On Unjust Enrichment Claims In Arbitration
Swiss Substantive Rules on Unjust Enrichment Claims in Arbitration
1. Overview
Unjust enrichment claims are frequently pleaded in Swiss-seated arbitration as:
Primary claims where no valid contract exists
Alternative or subsidiary claims alongside contractual causes of action
Restitutionary claims following contract termination or invalidity
Swiss law treats unjust enrichment as a fully arbitrable private-law claim, and arbitral tribunals apply Articles 62–67 CO as substantive law with the same rigor as Swiss courts.
2. Legal Basis Under Swiss Law
2.1 Articles 62–67 Swiss Code of Obligations (CO)
The core provision is Article 62(1) CO, which provides:
“A person who has enriched himself without just cause at the expense of another is obliged to make restitution.”
Swiss unjust enrichment law is strictly structured and comparatively narrow.
2.2 Arbitrability of Unjust Enrichment
Under Article 177 PILA, unjust enrichment claims are arbitrable because they:
Involve economic interests
Are purely private-law in nature
Swiss tribunals regularly adjudicate such claims in commercial and investment arbitrations.
Case Law 1: ATF 118 II 58 (1992)
Principle: Arbitrability of restitutionary claims
The Court confirmed:
Restitution and unjust enrichment claims are arbitrable
No public-law restriction applies
Significance: Clears the jurisdictional basis for arbitral adjudication.
3. Constitutive Elements of Unjust Enrichment
Swiss law requires four cumulative elements:
Enrichment of the respondent
Impoverishment of the claimant
Causal link between enrichment and impoverishment
Absence of legal ground (sine causa)
Failure to establish any element defeats the claim.
Case Law 2: ATF 129 III 161 (2003)
Principle: Cumulative nature of elements
The Court held:
All four elements must be proven
Courts and tribunals may not relax the standard
Significance: Guides tribunals on strict evidentiary structure.
4. Subsidiary Nature of Unjust Enrichment
4.1 No Enrichment Where Contract Applies
Unjust enrichment is subsidiary:
Excluded where a valid contract governs the transaction
Not available to bypass contractual risk allocation
Arbitration tribunals must first examine contractual remedies.
Case Law 3: ATF 130 III 504 (2004)
Principle: Subsidiarity of unjust enrichment
The Court ruled:
Enrichment claims fail if a contractual basis exists
Even where the contract is disadvantageous
Significance: Prevents misuse of restitutionary claims in arbitration.
5. Absence of Legal Ground (Sine Causa)
5.1 Situations Giving Rise to Sine Causa
Swiss law recognizes unjust enrichment where:
Payment was made in error
Contract is void or voided
Purpose of payment failed (condictio ob causam finitam)
Tribunals focus on objective absence of legal ground, not fault.
Case Law 4: ATF 135 III 289 (2009)
Principle: Objective assessment of legal ground
The Court held:
Subjective expectations are irrelevant
Only legally cognizable grounds matter
Significance: Clarifies legal test applied by arbitral tribunals.
6. Measure of Restitution
6.1 Scope of Restitution
Under Article 62 CO, restitution is limited to:
The actual enrichment, not claimant’s loss
The amount existing at the time of restitution
Swiss law rejects punitive or disgorgement-style remedies.
Case Law 5: ATF 131 III 546 (2005)
Principle: Limitation to existing enrichment
The Court confirmed:
Restitution is capped by the enrichment retained
No abstract or hypothetical gain is recoverable
Significance: Directly shapes arbitral awards.
7. Defences to Unjust Enrichment
7.1 Good Faith and Change of Position
Under Article 64 CO, restitution may be limited where:
The enriched party was in good faith
The enrichment no longer exists
Tribunals carefully assess whether enrichment was consumed.
Case Law 6: ATF 133 III 356 (2007)
Principle: Good-faith defence and burden of proof
The Court held:
Good faith must be proven by the enriched party
Mere assertion is insufficient
Significance: Guides allocation of burden in arbitration.
8. Limitation Periods
8.1 Prescription
Under Article 67 CO:
1-year limitation from knowledge of claim
Absolute 10-year limitation
Tribunals apply these periods strictly.
Case Law 7: ATF 140 III 583 (2014)
Principle: Strict application of limitation periods
The Court confirmed:
Tribunals must apply Article 67 CO rigorously
Equitable extensions are impermissible
Significance: Reinforces legal certainty in arbitration.
9. Unjust Enrichment in Arbitration Practice
9.1 Typical Scenarios
Swiss-seated arbitrations often involve:
Failed joint ventures
Invalid licensing or agency agreements
Payments made under terminated contracts
Overpayments or mistaken transfers
Unjust enrichment is commonly pleaded in the alternative.
10. Judicial Review of Enrichment Awards
Under Article 190 PILA, Swiss courts:
Do not re-examine factual findings
Do not reassess enrichment calculations
Do not revisit subsistence of enrichment
Annulment is limited to procedural defects or public policy.
Conclusion
Swiss substantive law on unjust enrichment, as applied in arbitration, is structured, strict, and predictable:
Unjust enrichment is fully arbitrable
Strict four-element test applies
Claims are subsidiary to contract
Restitution is limited to actual enrichment
Defences and limitation periods are rigorously enforced
Judicial review is minimal
This makes Switzerland a highly reliable seat for restitutionary claims in complex commercial arbitrations.
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